Foreign Exchange & Commodities Speculation - Constellation 1976 | Trading & Trend Research

Защо пазарите имат значение? Или нямат?

2011-12-15T16:31:00.003+02:00

11.12.2011

~ ~ ~

Защо пазарите имат значение? Или нямат?

~ ~ ~

“Обикновенитехора” не се интересуват от пазарите. Когато случайно стане дума и ме питат скакво се занимавам и отговоря, че търгувам с финансови инстументи, срещам многоинтересен спектър от реакции. Някои просто махат с ръка и казват “ооо, това е казино”или “оф, ужас, това е толкова скучно”, за други е просто нещо объркано, третиимат мнение за банкерите и финансистите, което не е ясно как точно е билоформирано, но е подчертано негативно. А с четвъртите ми е най-забавно. Вчераимах характерен разговор с мой познат. Случайно стана дума, че се “занимавам” сакции и валути и той каза “ей, ако знаеш, един познат преди време ми давашесъвети и аз така се набутах с едни акции, че сега са си вечно мои”. Не питах отлюбопитство. Само му казах “купувал си септември 2007, нали?” Много ми харесвакак после се учудват, че съм познал точно кога са се набутали. Чували стеанекдотите за това какво да правите с акциите си ако и шофьорите на такси ви сехвалят каква е доходността на портфейла им?

Обикновенитехора не искат да се занимават със “сложни” неща като борсата, финансите иподобни неща, в които има цифри. Особено цифри, които никога не спират да сепроменят, както са котировките. Интересно е, обаче как като стигне до тяхслуха, че на борсата се правят луди пари, всеки изведнъж много иска даинвестира. После стават дългосрочни инвеститори в активи, обезценили се с 90%.Бакалската сметка е, че ако загубиш 90% от капитала си, после трябва данаправиш 900%, само за да се върнеш в началната точка. Титанично, а? Основниятпринцип е на първо място никога да не си позволяваш да достигнеш до такаватитанично тъпа ситуация, но пък живота учи, че всичко е ясно, когато е късно.После сме много мъдри, ама ex-post, казано на латински, за разкош.

Другинтересен факт е, представата на мнозинството, че всеки може лесно да се научида прави пари. Отваряш си сметка и почваш да търгуваш и готово. На практика,обаче живота винаги ни връща към равновесната точка и излишъците и дефицититесе балансират. Това е фундаменталния принцип на живота, който важи и на борсатапоради простата причина, че финансовите пазари не са нищо по различно откумулативна проекция на надеждите и страховете на хората. Затова и случващотосе на пазарите има значение, защото наблюдавайки емоциите на хората ниенаучаваме много интересни неща за себе си, за егото ни, както и закумулативната емоция, която е завладяла света в момента.

Знам, че етрудно това да се смели. На баба ти на село не й пука за пазарите. Помислиотново. Баба ти не е затворена система. Тя може да си издои мляко и да извадикартофи, но нали трябва да получи пенсия, например. Или да си купи хляб илизахар. Пенсията й освен от мизерната държава, зависи и от инфлацията, авъпросната инфлация, не зависи само от конкретната държава, а и от световенфактор като Федералния резерв (“Фед”, Централната банка на САЩ), който всветовен план определя цената на парите. Да погледнем една много простаграфика. Тя не само е проста, тя е просто красива, защото с един поглед казвавсичко, което е нужно да знаеш за случващото се в момента, за кризата, заинфлацията, за Фед и за кумулативната емоция на хората в света.

Златото.

http://goldprice.org/gold-price-history.html

Е, колкосложно е да разбереш какво се случва в света като погледнеш тази графика? Катопогледнеш една планина как се издига нагоре и не те ли обзема лек страх, чеможе и да я изкачиш до върха? Или като видиш една подобна огромна вълна да сеиздига, не те ли е страх, че ще те смачка?

Тазиграфика казва точно това. Огромен страх. Хората ги е страх, понеже се печататпари и един ден това неминуемо ще се върне и ще ни захлупи като огромно цунамипод формата на инфлация. Първият “подскок” там към 80-та година е така нареченияпетролен шок, това е било преди много години и няма да даваме повече графики,които да покажат как цената на петрола се е качила и защо, но тогава инфлациятамного сериозно е уплашила хората и те се опитали да се “скрият” чрез златото.

Има лизначение това? Ти ако живееш с 1000-1500 лева и за месец всичко отива за наеми,вечери, дрехи и партита и не спестяваш, к’во ти пука? Принципно и да ти пуканяма особено значение, понеже какво може да направиш? Нямаш милиони да се чудишкак да предпазиш стойността им. Стойността, защотото както знаеш, 1 лев сега епо-скъп от 1 лев след време заради тази въпросна инфлация. На по-възрастните импука понеже пенсиите им са във пенсионни фондове и тия фондове са управляваниот живи хора, които по презумпция трябва да знаят как да ги управляват, но напрактика дали е така?

Това екато вица за бащата с 3 дъщери, където по принцип трябвало да са много богатиама на практика... Не знам, в живота всичко е относително и се разбира вотношение към нещо друго. Според Платон в древността, управляващите е трябвалода са най-мъдрите от общността, за да направляват живота и в правилната посока.Днес дали е така? А дали някога въобще, Това е разликата между реалността исвета на идеите. Света се формира по идеите на хората, които имат силата да гиреализират, но това не означава, че непременно тези идеи, които ни харесват сереализират. Нормално е тези, които са по-силни да формират света по технитеидеи.

Отново зазлатото. Един от настоящите хедж фонд звезди, Кайл Бас от Хайман Кепитъл, казав едно интервю от преди месец: “Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple". На прост българскитова означава, че купуваш злато като застраховка срещу идиотщината наполитическия цикъл (под PUT се има предвид Пут опция, което е деривативенинструмент, който просто казано е застраховка, в случай, че те е страх, чецената на даден актив, на “нещо”, ще падне). Толкова е просто.

В моментаживеем в много интересни времена. Китайците имат една поговорка, която бешенещо от рода на “Да не дава бог да живееш в интересни времена”. Предполагамидва от факта, че там от древността непрекъснато са се водили войни и спобедата на една или друга страна се е стигало да масови избивания. Четох скоров един исторически сайт за онези времена и бях шокиран да разбера, че след всекиподобен интересен исторически момент населението е намалявало с примерно60-70%. Подобно е било всъщност навсякъде, и в Европа и тн. Ето линк: http://www.hawaii.edu/powerkills/DBG.CHAP3.HTM. Нормално, всяка нова власт, която се издига върхукръвта на предишните иска да заличи всички предишни спомени, както и паметта завсичко, което е било преди това. За справка министерството на информацията поОруел в “1984”.

В моментаправителствата чрез централните банки “печатат” пари (сега вече не се печатареално, понеже всичко се прави по електронен път), за да могат да стимулиратзамръзналата кредитна състема, да финансрират дефицитите си и това просто създаваедна огромна купчина пари, която обратно пропорционално губи своята стойност.Твойте пари носят тази стойност и тя намалява с увеличението на общотоколичеството. Поради тази причина и хората в 21-век търсят убежище в златото,тази “варварска релкива”, както го нарича Лорд Джон Мейнърд Кейнс. Не ви пуказа Кейнс? Не е важно, просто този брилянтен джентълмен през Великата депресияпрез 30-те ражда и развива идеите за намесата на държавата за балансиране наикономическите процеси. Днес като чувате, че в криза трябва да се инвестира винфраструктура, мислете за Кейнс, не за ... даже няма и инициалите да пиша.

Както и дае. Всеки намира в живота нещо, което го интересува. Аз имам желанието дасподеля скромното си наблюдение как всичко е свързано. Пазарът епросто един механизъм, който определя цена и стойност. Съвсем кратко искам даподчертая, че цена и стойност са различни неща. Цената отразява емоцията, астойността трябва да е нещо фундаментално основано. Просто обяснено ако имашедин ключ, който струва 1 лев и той е за клетката за осъден, то осъденият биплатил цена многократно по-висока от 1 лев, заради проекцията на стойността насвободата, която този ключ би му позволил да купи.

От малкиние използваме същия принцип, който намираме на пазарите. Когато вече с плач исополи не получаваме каквото искаме се научаваме, че трябва да намерим нещодостатъчно ценно, за да го заменим за това, което искаме да придобием. Ценатана любовта? Принципно може да ни се струва безценна и съкровена. Да идеята залюбовта, предполагам е такава, но на практик? Това как точно е по-различно отборсата? Ако има търсене на 30 лева и някой е готов да предложи на тази ценаудовлетворение – готово, имаме сделка. Едни активи се търгуват на 30, други на3000. Зависи от проекцията на стойността, която купувача възприема.

Всеки отразличните детайли, засегнати тук, е много повърхностно представен. Извинявамсе ако съм допуснал грешка и ще съм щастлив да науча за нея. Опитвам се дапредставя просто една гледна точка, което естествено е един динамичен процес,защото с годините ние както трупаме повече знание, така и променяме начина, покойто гледаме и оценяваме както знанието, така и реалността, две неща, коиточесто се разминават както цената и стойността.

AUD/USD: Selling against the 61.8% Fibonacci level

2011-12-07T22:18:00.001+02:00

The rationale here is pretty clear. There is a pretty strong Resistance cluster at the 61.8% Fib at 1.0340 and the 200-Day MA at 1.0412.

Tentative selling here with a scope of the 23.4% Fib around 0.99.

Breakout signal in Brazilian Gol Linhas Aereas (NYSE: GOL)

2011-11-07T12:02:00.001+02:00

Gol Linhas Aereas Inteligentes S.A. (NYSE: GOL) operates as a low-cost low-fare airline in Latin America.

Recently the major Brazilian airline TAM was pushed as a buy candidate by major bank research paper. However I like the price action in the minor airline and find the technical picture much more compelling.

The chart shows a breakout signal confirmed by a close above 8 with an immediate target at 10.40 and risk below 7.5 which gives a reasonable risk management profile of the trade setup.

Fading the Euro Optimism

2011-10-25T23:52:00.003+03:00

EUR/USD Daily chart looks like stalling at the 55-Day MA at 1.39 just shy of the 61.8% Fibo at 1.40.

It seems like too much effort has been wasted on pulling that stunt so far - 5 days in row tight range and with usd/jpy finally dropping to punish all those easy believers in the BOJ magic + the dissapointment of the EU summit time looks ripe for some reaction.

In addition the 55-Day MA at 106.74 doesn't look like easy beam to hop above.

FX Majors ( € ~ £ ~ ¥ ) ::: Trading the RANGE

2011-10-14T00:30:00.003+03:00

Kapri Just entered those positions based on the assumption we are trading in the established range:

Short EUR/USD 1.3782
Short GBP/USD 1.5768
Long USD/JPY 76.88

Risk on a breach & close above yesterday Highs & Lows respectively, so looking to add in that space until the inflection point is not compromised.

~ ~ ~

EUR/USD

Daily chart show 1.3850 as a major Resistance level (50% of 1.4555 - 1.3147).

GBP/USD

Daily chart show 1.5789 as a major Resistance level (38.2% of 1.6627 - 1.5272).

USD/JPY

Yen finally started moving after the extremely tight range congestion in the last 2 weeks.

Yen has appreciated to multi-year highs and MOF/BOJ wouldn't be feeling comfortable with these levels, hence the fear in the market with an FX market intervention. Given that premise the LONG side is favored.

One can use both the 76.30 and 76.78 as SL levels - or one could average till 75 if the price goes that way on the assumption the BOJ will defend those multi year lows in USD/JPY.

EUR/USD & GBP/USD Rally's Resistance Ahead

2011-10-12T13:12:00.002+03:00

Market looks very short the contis and that is reflected in those over-extended moves in the EUR/USD and GBP/USD. It might be short covering and stop hunting.

Just as a reference we have solid Resistance areas ahead and majors are very close to these inflection points.

> Resistance layer on EUR/USD is between 1.3836 (July Low) and 1.3855 (50% of 1.4560-1.3149).

> Resistance area on GBP/USD Res at 1.5778 (July Low) and 1.5837 (Upper Bollinger Band).

-------

Daily ranges are over extended based on historical averages so I'm fading these moves with low leverage.

History repeats itself

2011-10-05T10:28:00.002+03:00

If you ever wondered if it is true that History repeats itself, check this out:

On Oct 3, 2008, SPX closed at 1099.23.

On Oct 3, 2011, SPX closed at 1099.23.

The Pound's trend is intact - GBPUSD immediate target at 1.68

2011-08-19T12:33:00.004+03:00

Stochastics and trend channel all point to trend continuation with an immediate target around 1.68.

Crude oil - Gold Spread at Historical High

2011-08-05T16:58:00.001+03:00

Spread is going big - something has to give.

Dr. Copper & Emerging Markets

2011-08-05T14:23:00.002+03:00

The tightest correlation of Copper is with the S&P and Brazil looks like digging deeper after the yesterday's market rout.

BRICs Update: Multi-speed growth and trend dispersion

2011-08-02T17:21:00.002+03:00

BOVESPA sitting on significant long term Support.

Russian RTS is trending higher Supported by the rising 21-Week SMA.

India's SENSEX is slowly approaching the flat Support at 18100 with a bearish 21/55-Week SMAs cross.

China's Shanghai Composite is in a long term range consolidation with a downside bias as the index is trading below all important Weekly SMAs. Critical Support lies at 2400 level.

Global Macro Update: Gold - EURUSD - Euro Stoxx 50 - 10Y Bund

2011-07-29T14:08:00.003+03:00

Trend Channel Upper line shows 1645 as a potential target. First Support lies at the 1578 previous High in confluence with the 20-Day SMA.

EURUSD is trading right on the middle ground of the recent 1.40 - 1.46 range Supported by the converging 20 & 72-Day SMAs. Downside the 200-Day SMA holds the key at the major psychological 1.4 level.

DJ Euro Stoxx 50 Index is trending down with scope of 2599 Lower Channel trendline.

10-Year German Bund is trending up amid growing economic concerns and US and EZ Periphery Debt problems. Previous High at 131 is an obvious target for the current directional move.

BOVESPA - Brazilian Equities in a Downtrend

2011-07-28T14:35:00.003+03:00

Downtrend target for BOVESPA > 58000 where previous Low should act as Support.

Vale is sitting on the 20 Day SMA and 32.02 looks as short-term target where the 200-Day SMA lies.

Petrobras hits Resistance at 35.19 and goes back to base around 33 and 33.65 where the 20-Day SMA would provide Support.

ITAU Bank trend down the channel with a target at 18.85 - a confluence of old Lows and the 200 -Week SMA Support.

Markets Bounce in the current donwtrend

2011-05-13T20:08:00.002+03:00

Sell in May and Go Away?

2011-05-05T14:04:00.002+03:00

S&P broke important support and technicals already signal a reversal - at least in the short term. A move below the 50-Day MA will accelerate the move.

Silver is breaking painfully down towards the important area of support around 30-34 levels.

Looks like a bubble unwinding but let's see what the end of QE2 brings as inflation is still not on the radar of CBers.

As indicated in the previous Global Macro update, Copper is moving toward 408-410 area which is a 'make or break level'. Below it the 200-Day MA will hold the move, however we might see a major exodus out of commodities once a snowball effect takes place as too many players jumped on the bandwagon of the inflation theme and maybe overstayed their welcome. Let's see how Copper will trade at the 400 level.

QE2 seems to come to an end and yet again deflationary fears are rising.

Rates are dipping down towards the 3.2% Support and if broken they will target again below 3%.

Are you ready for a bounce?

It is always important to wait for a confirmation and not jump in anticipation so I'm just making this observation that the trend is already overextended and technicals are in Oversold conditions for quite some time so a reversal is highly probable. When, how much, and whether it will be a Major reversal is to be seen.

Global Macro Update - Asset classes consolidate after the recent moves

2011-04-26T16:30:00.003+03:00

10-Year USTs need to fill the Gap and break out of the current ranges to initiate a decisive trend. Until ranges hold I remain cautiously monitoring the price action ahead of the end oof QE2.

Copper is consolidating inside a tight range and looks like a Descending Triangle is in the making.

It is a bit early to call a breakdown, however if we see a close below 407, Copper should slide to the next support at ~360.

On the upside the Major trendline (RED) is the important Resistance guide to price action.

Gold seems weary of the slow grinding higher and at a trendline Resistance with technicals screaming for a pullback if not Reversal.

Silver produced a large DOJI. Could be a blow-off top of just a temporary indecision.

Next Support comes around 42 and then will see which one is the case.

S&P 500 coils higher on low volume.

USD is trending inside the down channel.

Compalcency rules the market.

Inflation talk > Major Assets Performance since Jan 2008

2011-04-18T21:30:00.000+03:00

EUR/USD Trend Channel suggests a move above 1.45

2011-04-14T19:29:00.003+03:00

A simple 4H chart suggest we see some more filling the 1.44-45 range before a continuation along the trend above 1.45. My guess is the large intra-day swings we saw in the recent days were meant to shake off the weak longs and get more small fish that shorted on the move below 1.4450 on the boat before the true move above 1.45 starts.

Bollinger Bands & Slow Stochastics Trading System

2011-04-11T21:47:00.001+03:00

Here are just exemplary Entries and Exits for a Trading System based on Bollinger Bands and Slow Stochastics.

US Dollar Index (DX) - A possible Falling Wedge Bullish signal in the making

2011-03-30T16:35:00.002+03:00

USDX bounced off the important Support around 75.50 and is trading currently inside a possible Falling Wedge that could produce a Bullish signal if broken on the upside. An important level to watch for this breakout is 76.50.

30-Year UST Bond targets 117.50

2011-03-30T16:27:00.004+03:00

Everybody awaits hints of rising rates and a bond market selloff ahead of the end of QE2.

Technicall the 30-Year UST Bond is below the pivotal 120 mark and indicators point to a further decline which is in line with the fundamental expectations of rising yields.

Stochastics entered into Oversold territory, however BBands and charts points to immediate targets around 117.50-118 before a bounce could be expected.

Small Caps continue to Outperform the S&P 500

2011-03-30T16:13:00.002+03:00

The Russell 2000 index continues to outperform the S&P as the ratio chart shows. It usually means that large caps are fairly valued and money flows into Small Caps in search of additional alpha.

The Teflon Market - S&P and the Sector Performance

2011-03-30T14:19:00.004+03:00

The Teflon Market as they call it on CNBC shrugged off all the bad news from Middle East and Japan and is once again in Bull mode. SPX broke above the 55-Day MA targeting the 1335/4o recent highs. Technicals remain Bullish and trend looks constructive at this stage.

Small Caps represented by Russell 2000 are outperforming the S&P and looking for new highs.

Basic Materials remains in the best performing sectors list with Precious Metals leading the rally as Silver is on a strong Bull run with immediate targets above $40.

Energy Sector along with Crude Oil making new highs underpinned the strong performance of the S&P in the midst of the recent tensions. Oil & Gas companies seem to benefit from the rising Oil prices and the fears from the Nuclear power as Uranium stocks were hit extremely hard after the Japan Earthquake.

Financials are struggling and remain below the 55-Day MA. Housing sector problems and big number of mortgages still under water seem to be a drag on the balance sheets with slow credit growth doesn't help also.

Industrials are lagging the Materials and Energy but still perform in the top tier as economic recovery goes on.

Technology is having problems below the 55-Day MA for the moment as companies still withhold from spending.

Interesting enough the Consumer sector is a raging bull here but looking a bit tired as the trend is looking a bit flat even though we see a nice pull back after the Japan earthquake hit. The QE2 loose money policy should be benefiting the consumer while it is a bit confusing as the housing sector is struggling and mortgage payments are a drag on consumption for a large part of the lower income population until the unemployment falls to levels below 6-7%.

Utilities as a traditionally defensive sector are not in vogue and actually flat for the last 6 months.

Health Care is actually in a pretty healthy position. We should monitor the political decisions for further guidance in this sector.

30-Year UST Bond is trading at crucial Support

2011-03-08T20:29:00.002+02:00

Momentum indicates a slight pickup which is positive for the Bond price action as it is trading at crucial Support level.

A breakdown lower would signal higher long term rates, which however is important to watch as the FED is continuing with its QE2 program through the POMOs.

It might be a significant indication to note that the recent political tensions in the Middle East didn't inspire any notable 'flight to safety' buying and my take would be the market, spearheaded by the 'Bond Vigilantes' is continuing its short positioning in the bond market since the rise in rates is inevitable and the time till this event is ticking closer.

CRUDE OIL (NYMEX:CL) IS BREAKING OUT - ENERGY SECTOR OUTPERFORMS

2011-03-07T13:58:00.002+02:00

Crude Oil is the major market theme today with Energy sector companies the leaders in the S&P 500 and continuing to outperform YTD.

Crude is breaking above the most recent high today on the back of the weakening USD and the trend is accelerating as the indicators are signalling.

Global Macro Trends persist unnerved by the political tensions

2011-03-04T15:19:00.003+02:00

Weekly S&P 500 chart has a pending Golden Cross (50 x 200 Week MA upside crossing).

FED's QE2 is fueling cash in the equities market. The index is a bit overstretched above the 50-Week MA and a possible test of the Golden Cross levels - approximately 10% correction to 1175 - 1200.

Dr. Copper is alive and kicking as global growth is recovering boosted by the Central Banks' persistence in keeping the loose money policy.

Crude Oil is sustaining a break above the psychological $100 mark. Next target lies at around $112 with technical indicators supporting the bullish case for Oil.

Gold is testing the all time High around $1440 and might correct till $1360-80 to test the long term trend line Support.

Silver is a bit overstretched above the 50-Week MA and testing the Trendline Resistance at current levels ~ 34.50. At this level I'd watch for a possible fake break and correction to 26-24 levels where the Long term Support should hold the present Trend.

US Dollar Index (DX) is trading right at the Long term Support trend line at 76.40-50.

FED's policy isn't signalling any hints of tightening and the debt buying program is weighting on the USD value. Below 76 level the trend should accelerate.

The 30-Year UST Bond is trading right at the 200-Week MA which held the last 5 tests on the downside. QE2 program is still in action so I'd be cautious on breaks below as I see limited downside until June '11 after which it will important to see the market reaction as the bond king Bill Gross asked who will buy the US debt after FED stops the POMOs.

The 2Year - 10Year Bond Spread is currently Bullishly steepened which suggests more economic growth and spell bullish sign for the equities.

The longer end of the yield curve - the 10Year-30Year Bond Spread has also violently reversed and steepened in the end of 2010 which supports the bullish case for the equity markets so far.

US Dollar Index (DX) is nearing a crucial Support level at 76.50

2011-03-03T13:22:00.004+02:00

Chart by Global-view.com.

The 2-year EZ-US bond spread is favoring the EURUSD appreciation and a decisive close above 1.39 would most likely bring acceleration to the present trend.

US Dollar Index (DX) is trading near crucial long term support trendline which comes around 76.50. A break below opens the avalanche scenario of major slide in the USD while the FED is reluctant to hike rates and the ECB is starting to relay hawking signs.

The make-or-break level should be 74 where the present weakness would most likely accelerate to the 2008 lows.

S&P 500 Breaks the Uptrend Support

2011-02-24T13:11:00.002+02:00

S&P 500 closed yesterday below the rising trendline for the first time since September 2010.

Directional Movement generated a Sell signal, the Trend strength is fading with Momentum and ADX both showing weakness.

USD/CHF buy signal

2011-02-23T12:30:00.004+02:00

Swissy is trading on a Support level that held the last 2 breakdown attempts and technical indicators are close to giving a buy signal.

I might be a bit early for the move up the risk around 0.9343 is fairly good given the potential reward of targets around 0.9550 and a potential break of 0.96 with scope of the upper resistance band around 0.9780.

SOFIX - Trendline Breakout Confirmed

2011-01-25T11:25:00.003+02:00

SOFIX has now a confirmed Trend line break and targets the psychological Resistance at the 400 level. A break above will make the market focus on higher Resistance levels: 428 / 469 and the 2009 top above 500.

Risk is on a dive back below the broken trendline the odds of which diminish greatly with the rise of inflation and the global recovery we are monitoring in major markets. The money will soon start to flow from the center to the periphery again and frontier markets like Bulgarian Stock Exchange will find its spot under the sun.

US Dollar Index Reversal tracking the Flattening 2Y-10Y UST Spread

2011-01-19T14:41:00.004+02:00

The chart shows an extremely tight correlation of the US Dollar Index to the 2Y/10Y UST Notes Spread. The strength in the USD has been fueled by the Steepening in the spread following the Nov '10 announcement of the QE2 program.

This however seems to have run its course and the spread is turning flat along with the violent reversal in the USDX last week. This might be linked to an undergoing allocation into bonds or the effect of the ongoing bond purchases by the FED as the rate rise is postponed for the time being.

The reversal of the USDX ahead of the Resistance at the 200-DMA is a bearish sign and the ADX reading is signalling a pending Trend strengthening of the down move. RSI and Momentum indicators basically reflect the range trading conditions since Dec '10.

The EUR/USD staged a strong recovery off the 1.29 Support level as indicated in previous posts.

I had to rethink my thesis for USD strength in light of the latest developments and I assume the market will focus now on the unfolding Large Uptrend Channel as marked on the chart.

Trade wise I'd like to see a close above 1.35 for the 1.37 target to come in focus. I expect the price to lift into the 1.35-1.37 range for the next week. The bullish bias in the EUR/USD is present and only a close below 1.3240-50 would negate the present momentum and will force the market to re-think the current scenario.

UST 30-Year Bond - Pullback to 123

2011-01-10T12:35:00.003+02:00

Lookinf for a bounce into the upper channel trendline resistance around 122-123 after the Flat Support at 119 held the current slide.

Global Macro Update

2011-01-07T18:30:00.004+02:00

S&P 500 started to decline after reaching overextended level of complacency. While the pullback was much expected we must see 1235/40 broken to look for a bigger slide.

10-Year Notes have been in an oversold state for quite some time and need to hold above 119 for a move higher. There is a case for higher yields on the back of better employment data released this week however with the pending slide in Equities I'd look for a flight to quality pushing the Notes higher into the 121 level.

Increased Volatility in Precious Metals suggests a possible Distribution phase is in progress.

Price action around 1355 would determine the Short term sentiment in Gold.

Dr. Copper as traders call it is leading the Equities cycle and is still strong however just like S&P it is in pullback mode and we should monitor 420 and then 410 levels to offer support.

Last week's news of the large trader holding approximately 85% of LME's Copper is interesting and points to a possible squeeze just like the large exposure of the GLD ETF to physical Gold price might severely affect the price action once the public participation starts to fade and the holdings are started unwinding.

FX Review: Majors and the USD Bullish case

2011-01-07T14:11:00.002+02:00

Major currencies are all giving their gains to the US Dollar with once exception: the Canadian Dollar. According to a Research report by the Bespoke Investment Group (http://www.bespokeinvest.com/thinkbig/2011/1/5/country-market-caps.html) "With a gain of 0.54 percentage points, Canada saw the biggest increase in percent of world market cap in 2010."

For the technical levels on the various currencies, please look at the brief technical annotations on the chart attached.

Against the dominant notion of the effects of FED's QE2 program the USD has been on a surge since the announcement of the plan in Nov '10. Technically the break of the 80 psychological level is a sign of strength seen also in the RSI and just recently the ADX Buy signal.

The grand battle should happen at the flat 200-DMA at 81.66 which if overtaken will result in a trend acceleration. Euro-zone Peripheral Debt problems coupled with the pending pullback in major Equity indices and Commodities would see a flight to safety into USTs and thus will boost the current trend in USD. This is a scenario in the making so I'm watching it vigilantly how it will play out.

This chart gives a vague idea of the correlation in the move of the UST 10-Year Yield and the current USD trend. Since mid Oct'10 the Yield starts to lead the direction of the USD which is presently lagging a big portion of the move and thus I assume an acceleration once the 200-DMA in the USD Index is taken out.

EUR/USD needs to hold above 1.3055

2011-01-06T15:53:00.003+02:00

EUR/USD 4 hour chart:

The pair needs to hold above the 1.3055 crucial Support in order to fend off the bearish momentum which would overtake the market once below that level.

Market is currently sitting on a thin Support trendline around 1.31 and the Support cluster area 1.3082-85 and the 1.31 big Figure. The current drop in EUR/USD will be negated only after the pair regains decisively the 1.3270 level.

Below 1.3055 the Bearish scenario focuses on the 1.2966 Low and the consolidation range in the 1.2640-1.2920 area.

US Sector Performance vs S&P 500 - Small & Mid Caps Outperformance

2011-01-04T13:55:00.004+02:00

Small Caps (RUT) and Mid Caps (MID) Outperform the S&P 500.

IWM and MDY ETFs track best these cash indices.

Financials rallied off the lows in Dec 2010. Energy sector performed very strong in Q4.

Consumer Services and Basic Materials were the strong performers in 2010.

Health Care has been the weakest performing sector in 2010. Consumer Goods reversed their strength in Q4.

There was volatility in Q3 in Technology sector, however performance is overall flat for the 2010. Home Construction was a consistent Under-performing sector which bottomed out in Dec 2010.

Utilities as a defensive sector finished 2010 near the lows of the 2010 range. Industrials were a consistently outperforming sector and given the economic recovery builds momentum in 2011 they will continue to do well.

SOFIX breaks Long term Trendline Resistance

2010-12-28T13:33:00.003+02:00

SOFIX is testing a break above the long term Trendline Resistance in confluence with a second attempt to gain hold above the 100-Day MA.

If this test is confirmed by 2 consecutive positive closes First target is the 400 psychological mark and then 442-446 area.

Silver & Gold poised for reversal based on Trend Momentum Divergence

2010-12-23T13:50:00.004+02:00

Silver had a stellar rise with a 73.5% YTD performance and still holding above the steep Uptrend line support. Momentum studies are DIVERGING with current trend and pointing to a waning strength in the move. Waiting for the pending Short signals in DMI and ROC to unfold.

Gold has performed rather bleak given all the media attention as a main inflation wealth protection vehicle reaching 26.3% YTD return.

Momentum studies are showing falling strength in the current trend and I'm watching for similar pending technical Short signals.

Interesting chart here is the Gold-to-Silver ratio and its relationship with the US Dollar Index.

Since June till November there was a loose positive correlation that dissipated after the FED announced its QE2 plans.

Based on this chart I would look for a bounce in the Gold/Silver ratio which would come with a strong pullback in Silver which outperformed strongly Gold since August 2010.

VIX near 1 year Lows - Warning of a pending trend reversals

2010-12-22T13:12:00.002+02:00

Market extremes would favor taking the other side: Mainly going long Volatility and shorting the SPX. CBOE Put/Call Ratio is down however not at an extreme level so it might be giving a warning signal that the price moves hasn't run their courses just yet but it is time to stay alert of a trend reversal.

Momentum Divergence in GOLD: Pending Short signal

2010-12-22T12:17:00.003+02:00

GOLD is Media's favorite anti-inflation play. Inflation expectations for 2011 are predominantly Flat as I watched a GS economist on CNBC today. So what happens in an overcrowded position?

Technically I see a Momentum Divergence. Rate of Change and RSI are ticking down while the price is consolidating with a slight upward Tilt.

ADX has been indicating a strong Trend however with +/-DIs closing the Spread it develops intoa classic Short signal based on Welles Wilders's own work.

EUR/USD sitting on crucial Long Term Support

2010-12-22T11:55:00.002+02:00

EUR/USD is bouncing off the crucial Support area around 1.3076 (50% Fib) and the 200-Day MA at 1.3095.

It has bounced off the test of 1.30 support and now is trading off a long term trendline in confluence with the 200-DMA. For that to play out we need to see at least 2 closes above the short term 21-DMA which is tracking the current downtrend.

The medium term momentum framed by the downward trend channel however is pointing to 1.28 (61.8%) and 1.244 (76.4%) if the 200-DMA gives way decisively.

AMGN, Biotech firms and ETF are very Bullish

2010-12-21T12:44:00.005+02:00

AMGN broke out above 50 & 200-Day MAs on large Volume and is heading into a solid Resistance area around 58.

Biotech ETFs are very Bullish breaking above previous Resistance levels.

The relative performance charts of AMGN to the other S&P500 Biotech constituents is pointing to Outperformers: LIFE, GENZ & BIIB.

CELG & AMGN will have to overcome strong Resistance levels and GILD is clearly struggling.

EURUSD equality amidst 1.3440 - 1.3230 range

2010-12-15T11:02:00.004+02:00

Daily Chart makes for a downward trend channel so far.

Weekly Chart shows a giant Wedge in the making but the last top around 1.42 failed to test the Resistance Trend line so it adds an overall bearish sentiment to the big picture.

Price action is struggling below all major MAs (21 - 55 - 144) and it implies that if the 50% Fibonacci level (1.3433) of the last move is not regained decisively (which is a confluence Resistance area along with the 21-Week MA at 1.3372) a test of the latest base around 1.26 is following.

Monthly chart shows the significance of the 144-Month MA which held the last move down to 1.19 which coincided with the 50% Fib retracement.

Commodity Groups & S&P Sector ETFs' Performance YTD

2010-12-03T14:44:00.005+02:00

Agriculture has outperformed with 38% YTD and PMs are catching up with 29%.

Energy and Industrial Metals are performing rather bleak in the 8-10% brackets.

Best performing sectors have been the Consumer Discretionary (22%) and Industrials (14%).

Energy and Materials are in the lower 5-6% bracket.

Healthcare & Financials are struggling with 7-8% Negative performance.

Business Cycles & Sector Rotation - Selection of charts

2010-12-03T14:23:00.004+02:00

Source: stockcharts.com

Source: D.W. Dony and Associates Inc.

Source: Standard and Poor's

Source: NBER Research Paper

Source: John Veitch, CFA

_______________________________________

Bond Portfolio Allocation

Source: PIMCO educational section / BofA Merrill Lynch, JPMorgan, NBER

Brazil, India & Turkey Stock Indices Trend updates

2010-11-30T19:17:00.002+02:00

BOVESPA - H&S rolling down pattern points to a rotation below the 200-DMA.

India Nifty 50 Index has a Broadening Top pattern with broken base which points to a target at the 200-DMA.

Turkey 100 Index bearish breakdown of the supporting trendline targets the 200-Day MA.

All charts have oversold reading on the Momentum and RSI technical indicators which might point to a technical bounces however it still means that the prevalent trends are intact and they might accelerate further.

EUR/USD and PIGS Bond Spreads - Trend Reversal

2010-11-11T12:54:00.002+02:00

PIGS Bonds Spreads and rising higher.

EUR/USD Daily chart has the 3 Black Crows pattern suggesting a Trend Reversal is in place - a simple 38.2% Fib retracement target lies at 1.3634.

AUD & CAD Counter trend plays

2010-11-04T19:51:00.003+02:00

AUD/USD & USD/CAD are trending after the QE2 announcement, however I'm buying $ against AUD and CAD as I observe these trend channels that suggest a reversal in price action - from the Top in AUD/USD and off the Bottom for the USD/CAD respectively.

TREND

2010-11-04T11:11:00.001+02:00

Trend is like a big river - sailing with the flow is easy and pleasant - going against the flow is bold and can be done if one has the strength but when one runs out of energy the river flow takes him down the stream. That's the beauty of natural forces governing our lives and trading as well.

BALANCE

2010-11-03T23:37:00.002+02:00

Everything we like to learn, find or experience lies within us.

All outward things or ideas are just an illusion, a play of our untamed minds.

Keeping the one, maintaining concentration and being centered all the time brings one a step closer to his true realization.

Forget the delusion that someone know something and you need to learn from somebody.

Just look inwards and learn from the immense source of knowledge and wisdom that is found in the true nature.

Reflect and keep the balance and things get accomplished without the slightest effort.

TRADING PATTERNS

2010-10-22T18:21:00.000+03:00

US Dollar Index (DX) reversal based on the AB=CD pattern

2010-10-22T02:38:00.002+03:00

USDX Weekly chart suggest we have a completed AB=CD pattern that implies a reversal into USD strength with immediate target 79-80.

Stock Market Momentum is topping

2010-10-22T01:03:00.004+03:00

My previous target 2950 on Shanghai Composite (http://constellation1976.blogspot.com/2010/10/shanghai-composite-momentum-persists.html) has been met and actually exceeded. Think momentum is Topping here and I expect a rise in Volatility.

S&P still manages to squeeze higher but Momentum is waning.

VIX is like we live in bliss and economy is alright. My assumption is hang there for a while and Volatility spikes higher as some 'fundamental' data or other theme surfaces again. Be it QE2 disappointment, another debt problem or political tension - there is always something to blame for the price action. If anyone cares.

USD/JPY and the 20-MA

2010-10-18T19:49:00.001+03:00

The 20-MA works like a Clockwork, especially on the USD/JPY.

Pay special attention to those long shadows on the Candles.

S&P at Resistance - Reversal after QE disappointment?

2010-10-15T14:43:00.002+03:00

What we have here?

Candle pattern says Shooting star followed by a Hammer - do we have a signal - I assume at least caution here but we gotta hear what Mr. Bernanke has to tell markets at this critical junction.

10Y Note /30Y Bond Divergence - Signs of Weakness

2010-10-14T23:22:00.003+03:00

10Y Note made Higher High however 30Y Bond might be signalling weakening in the trend of the Fixed Income market which is evident in the Momentum readings.

I could not know if bond vigilantes are rejecting owning a 30Y paper at the current low yields or the FED has more power in suppressing the short to medium term (2-10Y) yields however I take this DIVERGENCE as a sign of pending trend weakness.

Reuters/Jefferies CRB Index near its 200-Week MA

2010-10-14T19:04:00.002+03:00

Weekly chart shows CRB is on a Breakout mode and near its 200-Week MA.

Momentum is rising and trend strength is slowly kicking in.

Inflationary times are coming and judging from the chart they will have a long way to go.

Shanghai Composite - Momentum Persists!

2010-10-14T16:00:00.002+03:00

Following on my previous call (http://constellation1976.blogspot.com/2010/10/shanghai-composite-momentum-buy.html) on the Momentum strength in SSEC here we are above the 200-Day MA.

Next target is the confluence of the Trend Channel and the previous lows around 2950.

USD/JPY - A Tale of Trendlines and Anticipated Breakouts

2010-10-13T10:13:00.001+03:00

USD/JPY Hourly Trendline - Works like a clockwork.

A question when it finally break to the upside remains.

US Dollar faces Reversal after FED Minutes suggest further QE

2010-10-13T02:26:00.002+03:00

Weekly USD/JPY shows under the Long term Support line - there is possibility for a fake downbreak unless BOJ walks out of it..

Daily USD/JPY shows clear down channel that meets the trend line Support at this critical junction - my test scenario suggests we go for 84.

Nice horizontal Range withing the Rising Trend Channel in 4-hour EUR/USD - so we test 1.4 before we break lower or we see a failure right here?

Same case in 4-hour AUD/USD - Trend lines suggest we go for a test of 0.99 before a significant Resistance kicks in. The surprise will be an outright break here.

US Dollar Index looks like bottoming and yesterday candle resembles a Bullish Engulfment, however today's candle is not a good confirmation sign..

Momentum and RSI suggest we bounce off the Lows which are significant on the long term charts around 77 level and my guess is we see a wave of USD buying after the FED announced its blur willingness to ease further its policy.

US Dollar Index nearing a Reversal

2010-10-10T23:25:00.004+03:00

I bet we reverse at this level near here at least for a short term reaction to the overstretched trend.

Price action observations & trading system contemplations

2010-10-09T19:35:00.003+03:00

Trending and over extension of the move doesn't compromise the trend momentum.

Different time frames and fibs - now that moves exceeded the conservative projections I focus on the momentum concept as it is very insightful to learn never to fight a roaring trend and always let it go until you see a rising volatility, reversal chart pattern or some other sign of trend weakness.

Some observations on using the 13-MA in a trend.

I have drawn the consolidations that follow the price thrusts. Clear Support & Resistance levels are shown.

Time & Price relationship.

MAs are enveloping the unfolding trend but they lag and this actually helps to project a horizontal range trading after the motive wave until the MA makes up the space and then the trend move ensues.

Shanghai Composite - Momentum Buy!

2010-10-08T19:51:00.002+03:00

China is on the move up - trend momentum is rising and RSI is converging. Once 2700 is cleared we target the 200-DMA.

EUR/USD Fibonacci levels to watch

2010-09-22T14:14:00.002+03:00

Well who says Fibs don't work? LOL.

EUR/USD at 1.26 nicely bounced off the 50% level (1.1869 - 1.3344).

Now that we have breakout of the 1.3344 high we focus on 1.35 which is the 50% of the bigger 1.50 - 1.186 move.

Currencies Breakout versus the US Dollar

2010-09-14T18:56:00.002+03:00

AUD/USD broke above psychological 0.94. Now in uncharted territory we can't really force a target - the Channel top gives a notional 0.9550 cap on the breakout move.

EUR/USD broke above 1.2920 and trading above 1.30 now. Trendline comes in 1.3050 but significant focus of the market will be attracted by the flat Resistance converging with the 200-Day MA at 1.3286.

GBP/USD has been a weak link especially on the crosses reflecting the global imbalances like GBPAUD and GBPCAD.

GBP/USD is trading above the 1.55 BOX top with immediate targets at 1.5580 and 1.57.

Volatility is making new lows but Bond Yields are turning

2010-09-13T22:29:00.002+03:00

10-Year Note is making Bullish Engulfing pattern with low at the 50-DMA Support.

So we look for confirmation on the upside.

10-Year Yield made a Bearish Engulfment right at the 50-DMA Resistance.

ROC is in overbought territory but RSI is just signalling a bullish trend so a confirmation on the downside is needed as we saw the same situation above in the underlying bond price.

Volatility broke to a new Low as complacency seems to win over fear and markets are managing to run higher. My guess is we break out of this state of mind very abruptly but in timing we must be canny so I'd watch for a close above the Horizontal line.

Volatility is reaching support - Expect a RISE in Fear

2010-09-08T23:17:00.002+03:00

Short term Volatility fund VXX is reaching a Support trendline. I expect Volatility to rise and this should mean fear will spread again.

Bonds are trading higher - Yields are easing

2010-09-08T12:53:00.003+03:00

TLT has notably bounced off Gap Support line and TYX correspondingly is trading lower after reaching my notional target at 3.9% as I wrote a week ago. All is going okay in the New Normal...

Japanese Govt Bonds are correcting but running into Support

2010-09-07T16:22:00.002+03:00

Yield is creeping higher inside the downtrend channel targeting 1.46%.

Weekly bond prices came off Overbought levels on the Weekly RSI however they are at a long term support level and will have to consolidate before the move resumes and certainly IF only the global re-flation is on the menu again.

Investment Cycle by John Paulson

2010-09-07T14:38:00.004+03:00

This interesting piece was published and insightfully commented by ZERO HEDGE.

Here a link:

http://www.zerohedge.com/article/exclusive-paulson-portfolio-post-mortem-which-we-learn-maestro-himself-advising-jp-future-go

The rising Volatility in the Bond market signals a possible trend change

2010-08-31T10:42:00.004+03:00

The Long Bond is trading inside a rising trend channel and bounced off the 13-Day MA Support on the last Friday Option Expiry as Tonbridge AL kindly reminded.

The COT Report however shows a possible change of hands as Commercials and Large Speculators are exchanging their exposure and that is a serious sign of caution. The trend has been strong but it always reaches a point where it bends and the rise in Volatility on last Friday is a sure sign of possible change.

10Y Note has similarly reversed the Friday volatility break but the COT Report here also shows that Commercials as swapping holdings with Large traders and we should remain cautions of the underlying moves.

30-Year Treasury Bond yield reverses with initial target at 3.9%

2010-08-30T14:33:00.002+03:00

Bouncing off the lower channel trendline 30-Year Bond yield is targeting initially the Upper trendline resistance at 3.9%. RSI and ROC are indicating there is a reason for strong conviction in this trade, not to mention that the candle is qualified for a Key Reversal sign.

Japanese Government Bonds near their 20-year High

2010-08-20T14:21:00.003+03:00

Japan 5-year CDS is making Higher Highs/Lows.

JGBs are drawing investors attention recently as they are close to 145 which was their 2003 High price. Monthly RSI is not even in Overbought condition so timing of a Short sell would be of a great importance since this market has been ranging for a full decade with no meaningful correction.

Kyle Bass from Hayman Advisors made a pile of money in the sub-prime crisis and he is now on the wires for his Short JGB position:

http://www.marketfolly.com/2010/08/kyle-bass-betting-against-japanese.html

While deflationary pressure is building and everybody is starting again the bond bubble talk I'm pleased to observe a high momentum trend in bond prices and I believe it will be a nice educational experience to see how high it can go until it finally breaks. Then when inflationary cycle begins we will be ready to start building an equities allocation.

SOFIX trend update

2010-08-19T10:08:00.005+03:00

The major Bulgarian Stock Exchange Index - SOFIX bounced off 360 level of Support vigorously but I'd like to mention a few points of caution before we cheer the rise.

The chart clearly shows a series of Lower lows/highs and until this is changed it would be early to call a trend reversal.

400 level is a Major Pivot and a sentiment indicator as it clearly turned from Resistance into Support and now it would be again a serious test for the Bulls. Indicator-wise RSI is in deeply Overbought area and it is a sign of caution. If we see continuation of the upmove it might hang in there for a while but still we might see a powerful correction until 400 is decisively cleared and technical indicators are favorable for a Long position.

On the other side the Upmove is supported by the Trenline support coming off the Feb 2009 Lows and also price is hanging above the 100-Day MA, which however is pretty flat and it suggest we could just have a prolonged period of sideways consolidation.

TLT - Long-end Bonds are on a steep trend move

2010-08-18T15:51:00.002+03:00

SOFIX breaks the Wedge pattern to the Upside

2010-08-18T10:51:00.004+03:00

Following my last chart view of the major Bulgarian stock index - SOFIX from May 16, 2010:

http://constellation1976.blogspot.com/2010/05/sofix-testing-first-support-at-398-399.html

I present an update on the market action.

Back then I wrote: "Technically the index is moving inside the Trend Channel which is the first Support at 398-399 is broken decisively with a close below will run into the Critical Support area at 360-344 where the Trendline support confluence is located. ... The important spot below 399 is the August 2009 Gap (360-380) which is begging to be filled by any textbook example. So the focus is if the confluence of the 344 support and the Trend channel bottom will provide the sufficient cushion for a reversal."

Indeed 360 level got tested 3 times and proved a hard Support from which stocks bounced for a swift rise into the 390-400 Resistance Area. The break to the Upside is shown as a breakout from a Falling Wedge pattern which is typically a strong Bullish sign. I expect however in the mid term some consolidation in the 380-400 area before the uptrend continues. Only a fall and close below 380 would turn on the bearish sentiment again.

Equities, Bonds, Commodities and FX Markets Update

2010-08-16T16:03:00.006+03:00

EUR/USD found support above 1.27 at around 38.2% Fib (1.1860 - 1.3350) and is close to the Trendline support - a close below 1.27 confirms a trend reversal.

SPY broke heavily through the Trendline support and is leaking badly to the downside with first target around 105 which contained the trend in the previous test. A break lower would show high risk of making new lows and possibly reverting to new bear market.

TLT - Bond markets are creeping higher in a mighty trend style while long term yields are depressed and deflationary pressure is rising - FED's move into Quantitative Easing 2.0 is definitely in progress but seems there will be more pain until Inflationary theme kicks in - possibly 6 to 9 months if the first stimulus campaign and its results from March 2009 could be any guide.

GLD - Gold is trending higher again after the correction in July. We need to see 120 broken for a test of the all time highs. There are plenty of rumors and research on gold manipulation and price suppression however until deflationary pressure is cooled off I assume it's pretty normal for Gold to correct its price. On the other side John Paulson and David Einhorn which are high level hedge fund professionals have large allocations in GLD and physical Gold so I keep na eye on the trend strength.

Copper has been bullish despite the stock corrections. Its chart seems like a large swing graphic of the economic tides and its over sensitivity to the industrial activity. I expect it to go down until we have new stimulus measures from the global governments as it seems the first stage of the stimuli-induced growth is already losing strength and austerity measures are not of great help.

Crude Oil is near support as ween from the trend channel - I would expect however to see it lower as inflationary pressures are pretty far away and economic growth is not on the main list for the time being.

VXX the short term VIX fund is basing and creeping higher as stocks decline and markets are going back i to Risk OFF modus operandi. I expect VXX to rally along with the Bond market and the SPY decline since September is usually a pretty volatile month and it's time to shake off the complacency of the markets that has been ruling as of late.

GOLD Trend - 21&72 DMAs Dead Cross ahead of the 200 Resistance-Day MA

2010-07-30T12:30:00.003+03:00

Volatility Breakouts usually signal trend reversal and so far we witness one in GOLD.

GOLD is developing a Falling Wedge pattern which has a Bullish implication if broken on the upside so I remain cautious in the meantime since we see a logical bounce off the important 1160 Support as marked on the chart. Lower stands 1140 Support area along with the 200-DMA at 1146 which is a very tough layer of Support to crack at least on the first attempt, IMHO.

I expect a retreat to 1200 Resistance first marked by the Trend line and the 21-Day MA.

The Bearish scenario is supported by the 21 & 72 - Day MAs Dead Cross, the sustained fall in the Rate of Change and the rise in the ADX reading above 26 which signal trend acceleration and at the moment the Trend is DOWN until proven otherwise.

GOLD Trend - Momentum is Fading

2010-07-12T13:12:00.003+03:00

GOLD has been actively watched in the last months as it has been making new highs and touted as the ultimate Inflation protection vehicle. Inflation is not easy to find right now as several measures of the monetary velocity show a deflation threat is still intact and FED seems reluctant to signal end of QE with dismal Industrial Production data released a week ago.

Technically speaking GOLD tested the Trend line Support below 1200 and is now reaching a confluence of Resistance levels: the former Dec'09 Close and Open around 1216 and the 50-Day MA sitting on the same level. The Momentum since the May '10 top is fading and we could see how the Labored move failed with a volatility break which is a good signal of a possible Trend change. ADX has already given a Short signal.

US Treasuries 2y/10y Spread Flattening

2010-07-02T16:18:00.002+03:00

The 2y/10y Spread has possibly reached a reversal point in its flattening move.

Interesting to watch are the 10-Year bond price to S&P correlation which might indicate more economic hardship ahead and equity weakness. The same is indicated by the 10-Year yield to the S&P.

Yield Curve Flattening - Bear Market looming

2010-06-29T00:37:00.003+03:00

yield Curve Flattening has straight Bearish market implications.

It usually points to impending economic contraction and deflationary pressure - simply said Quantitative Easing 2.0 is coming.

GOLD: 'Trend Is Your Friend'

2010-06-19T12:59:00.002+03:00

Moving nicely inside the Up-Trend channel.

Note that the Commercials' and the Large Speculators' positions has been perfectly aligned for this trend continuation to run smoothly since the Lows in early 2004. It is important to note that Commercials are actually increasing their hedging short positions and close to the size when they first probed the 1248 High in late 2009. A basic view would be that they try to lock in as much volume at the present price levels as they are able to.

Interesting fact is that according to The World Gold Council the largest Gold Reserves holder is the US with 8 133 tonnes which represents 70.4% of its reserves.

This chart reminds every trend has an end where it bends. No way I would call it as we never know where a trend might end up especially as I wouldn't rule out a squeeze and a blow off top phase once the 1260 level is decisively taken out. Both RSI and Momentum show strength in the trend now and MAs are confirming the strong inertia the move has gathered. That's why as Physics laws rule we shouldn't go in the way of a body that has gathered such power along its motion course.

Now I mentioned the END as this Rising Wedge I have drawn is just an assumption and should be monitored for confirmation as it has strong Bearish implications. However I would look for a blow-off top first.

Spain CDS is creeping up...

2010-06-16T15:28:00.003+03:00

European sovereign credit is experiencing escalating problems.

S&P500 struggling above its 21-DMA

2010-06-15T15:31:00.004+03:00

Momentum is going on but shows signs of topping. Same goes for RSI struggling ahead of the 50 level.

Monday close was a Shooting Star formation which definitely Bearish for stocks...

Gold, Crude Oil & Copper trend update

2010-06-15T01:22:00.002+03:00

Crude is developing inside a Bearish Rising Wedge and the 200-DMA caps the ascent at $77.

Rate Of Change is showing the Momentum is topping.

Gold is either gathering strength to breakout to new High or to drop as a stone as it is the only commodity still in rising trend. Trend lines are still keeping is bid however the pivotal short term 21-DMA is turning flat.

RSI and Momentum are waning in accordance to the failure to take out the 1250 level twice.

Copper is going down in the trend channel and momentum and RSI are confirming the price action. The industrial metal down trend is signalling bad for the economy and the emerging markets overheating.

S&P500 developing inside a Bullish Falling Wedge - 1107 is 'make or break' level

2010-06-13T04:57:00.002+03:00

S&P is telling a possible reversal story but not confirmed until the 1107 Resistance is taken.

The Expanding Triangle was tested first on May 6 - 'The Flash Crash' and now stocks are trading below the confluence of Resistance levels at 1107: The 200-Day MA, The horizontal level where the last up-move was capped and the broken Support T/L of the previous Expanding Wedge.

One important note is the Rate Of Change had broken to the upside and the ADX is signalling the trend strength has abated with possible Bullish cross confirmation. Same goes for the RSI which is still lingering below the 50 level so a rejection off the 1107 would be a massive short signal.

LORD KEYNES

2010-06-06T16:41:00.001+03:00

"The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again."

A Tract on Monetary Reform (1923)

In truth, the gold standard is already a barbarous relic.
Monetary Reform (1924), p. 172

Crude oil & Gold - Trend update

2010-05-29T15:01:00.006+03:00

Violent slide in Crude was even more violently reversed off the $67 lows for a quick ~38.2% pullback. Now that we had that tight range day on Friday my take is a new test of the Lows.

Interesting to observe is how Friday's price action is confined inside the chart points markets by the horizontal levels. DMI has a pending Long signal and trend strength is going down so I expect more range trading for the time being.

---------------------

Last Friday's slide was bough up and closed near the Open but trend strength is on its lowest level.

Spike in traded volume is similar to the previous 1228 peak and while timing is tricky I still monitor price action for a continuation of the Reversal move at least until the 1248 high hasn't been challenged again. The thing is however price is swinging above the 8-MA which I use for short-term momentum indication - so I assume bulls will make an attempt for a new push higher.

Metals are giving mixed signals while Gold's trend is still intact

2010-05-27T03:26:00.002+03:00

Platinum broke the trendline support but still above the long term horizontal Support which is key to its present trend.

Palladium had the most Bullish trend and the steep selloff is giving sharp alarm of exit. The horizontal Support is key to the current direction just like in Platinum but the signal here is far more acute.

Gold - the ultimate safe haven... Still trend channel is intact and holding above 2008 Highs. However the Leaders in Metals complex are in alarm mode and here is a real test for the dominant assumption that Gold will save your wealth.

Copper is the prime industrial indicator and as such we gotta be prepared to see industrial contraction since it broke the prime trendline support and now as in the first 2 metals the horizontal Support is key to the market sentiment and needless to say a breach below would be a major Bearish sign.

AUD/USD - The Reversal path

2010-05-21T23:41:00.002+03:00

The analysis is based on the assumption that we saw the Lows of the Flash Crash saved today and this translates to bottoming in the commodity currencies and AUD in first place.

Daily chart: the Diagonal T/L support was breached but we have retraced a good part and today will have a Bullish Harami /Inside Day/ a good sign of reversal.

4-H chart: a bit strange use of Fibs but this way they fit with horizontal Supports off historical chart point.

Tradewise 0.8350/60 is needed to be decisively cleared for a powerful pullback which ultimate Resistance will be the Feb 2010 Low at 0.8575.

Market Psychology Cycle

2010-05-20T15:56:00.002+03:00

Crash of the BRICs - yet nobody's paying attention?

2010-05-20T13:56:00.002+03:00

Shanghai Composite has had its Dead Cross in a while but in the last 2 weeks it has been violently wiping out market cap in a fast falling trend. While ADX and RSI might be indicating oversold conditions I'd pay heed to the fact that SSEC is leading the BRIC's pack.

Technically there might be seen some violent pullbacks as we all know are characteristic to Bear markets but I would never establish a Long position until the trend has shown signs that it has run its course. Right now we are just starting.

Russia's RTS has just closed below 200-DMA, broken a long lasting Support Trendline and is ready to roll as Shanghai has shown the way. The ADX is Just starting to grow and the trend will gather force once it closes below 1350.

India's Nifty Index has also just breached the 200-DMA and after a brief pullback again trading below the important Trendline Support. ADX is showing growing strength in the developing trend.

Brazil's BOVESPA is tightly following the Leader (Shanghai Composite). It has been rejected at the test of the 200-DMA and it's making new lows with ADX showing real strength in the move.

The chart is actually showing massive Double Top formation and the breach of the Neckline around 62/64K is showing immediate targets around the 52K lows.

Crude Oil is leading the crash - Gold is Lagging

2010-05-19T13:16:00.003+03:00

EUR/USD - Awfully Bearish Sentiment

2010-05-19T02:12:00.002+03:00

The Euro enjoys an awfully bearish sentiment and got a steep and overextended selloff in the late NY session today.

I'm buying the bottom here for a short-term bounce as I'm tempted to explore the contrarian psychological approach to buy when the sentiments is calling for the ultimate demise on the Euro.

Gold - Trend Reversal

2010-05-18T14:54:00.001+03:00

Macro Update - Trends & Ranges

2010-05-18T05:26:00.005+03:00

Possible Blow off top in USD Index.

Possible Double Top in GOLD?

30-Year T-Bond is range-bound with scope of testing the highs - that's implying lower yields...

S&P 500 was rejected at the 50-Day MA Resistance - RSI and ADX are in confluence with he downtrend in the stock index.

SOFIX testing first Support at 398-399

2010-05-16T23:54:00.002+03:00

Following the Feb 25, 2010 post:

http://constellation1976.blogspot.com/2010/02/sofix-trend-line-support-broken-down.html

SOFIX is still trending down and last week just broke the previous low and tested the 398 Support level. Technically the index is moving inside the Trend Channel which is the first Support at 398-399 is broken decisively with a close below will run into the Critical Support area at 360-344 where the Trendline support confluence is located.

That scenario depends on the breakdown of the 398 level but since we just run into the SELL in May and Go Away mentality and the S&P crashed ahead of the 50-Day MA (1174) Resistance it is most probably that we are back to the global correlation on the way down (since we kinda missed the move up that most of the Developed and Emerging Markets enjoyed).

The important spot below 399 is the August 2009 Gap (360-380) which is begging to be filled by any textbook example. So the focus is if the confluence of the 344 support and the Trend channel bottom will provide the sufficient cushion for a reversal.

EUR/USD vs. Eurodollars - Perfect correlation

2010-05-16T16:06:00.002+03:00

Gold & Macro -- S&R, Range & Trend

2010-05-15T04:15:00.002+03:00

S&P 500 - Major Resistance at the 50-Day MA

2010-05-13T16:26:00.001+03:00